Carry Your Greatest Credit Card in Your Heart

A few years ago, I was walking into one of the commercial buildings of M.G. Road, when a young well-dressed man accosted me and asked me whether I would like to have a credit card. Obviously he did not know me from Adam, and there was nothing about me to show my wealth or my credit-worthiness. I was walking, not driving down in a chauffeur driven car, I was ordinarily dressed – but this gentleman seemed to be quite keen on enrolling me for a credit card!

Credit: Thomas Kohler | CC-B-2.0 | flickr.com

Very little water has flown down the Cauvery river since then, but I have often wondered what is happening to our economy. Loans are not being sanctioned, they are not being offered, they are being thrust down to people, whether they have the capacity to repay or not. The credit card has, in the last decade or so, become the symbol of free and irresponsible spending. What was originally meant to be a tool of convenience whereby you do not have to carry heavy cash, pay by card, and settle the bills by the end of the month – slowly became a means for people to spend the money that they did not have. When the limit on one credit card was crossed, some immature people would take another credit card and start spending all over again. From businessmen making reckless expenses in the hope of future inflows to youngsters who obtained a never-before independence to spend without any budget, the credit card created an entire generation of irresponsible citizens.

Credit: Gareth Saunders | CC-By-SA-2.0 | flickr.com

Credit: Alan Cleaver | CC-By-2.0 | flickr.com

Many credit card companies did not mind bad debts from some of their members, because the interest and penalty they charged for late or defaulted payments brought them more than their due share of income. Exorbitant interest rates and mind-boggling bills were followed up by goons who were “bill collectors”, and the hapless consumer was made to pay.

Many have not learnt their lesson even now. Families have been destroyed and businesses have closed down, people have lost their jobs, and parents or spouses have been made to pay through their nose due to reckless spending. Hence it is the duty of responsible and mature society to create an awareness of this malaise before it engulfs more and more young people. The recession in the economy has been a good warning bell that high incomes cannot last forever. If people learn to live within their means, they will neither be affected by recession, nor will they lose their night’s sleep worrying about creditors.

In every scripture man has been exhorted to live frugally and within his means. We grew up with our elders telling us spread your legs only as far as your bedcover goes – a rustic way of warning that legs that go beyond the blanket will not remain warm and comfortable. There is also an element of faith in the Almighty – if one is secure with the thought that one needs to be patient, and God will give us our needs and wants, then there will not be a craving to get luxuries and expensive things now. Many moral stories abound of the wisdom of “delayed gratification”, having the ability to wait to get one’s just rewards.

A big part of financial freedom is having your heart and mind free from worry about the what-ifs of life. ~ Suze Orman (Internationally acclaimed personal financial expert)

Credit: Morgan | CC-By-2.0 | flickr.com

On the other side of the fence is – Savings. If we develop the habit of saving for a rainy day, we not only do not have to worry if things go wrong, we also get the pleasure of buying goods with our hard-earned money. When one works hard and sincerely towards one’s goals, the joy of finally attaining it is far greater than if the same boon was handed over in charity. This can be achieved by keeping away from the current trend of buying everything on credit or in installments. In fact, many young people have become victims of the EMI Culture, i.e. Equated Monthly Installments, the amount you keep paying every month towards the principal + interest, often for years and years.

Escape from the “credit culture” can also come from developing the skill to differentiate between Needs and Wants. Man’s needs are indeed very small – two square meals, modest clothing, a roof over one’s head, and expenses to run the household. But in today’s high-strung consumer culture often we forget that having a vehicle may be a “need”, but buying an air-conditioned luxury car with four-speaker audio system, leather seats, and a gas-guzzling engine, is a Want.

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Ask the senior citizens around you how they built up their lives. They worked their way through a bicycle to a second-hand scooter, to perhaps a new one, then a second-hand car, and finally a new one. The joy of each such promotion as they progressed in life, was great. The whole family would celebrate the purchase of a small household gadget. And that actually brought the family closer to each other. The home, the family is the greatest anchor in today’s tumultuous society, and the home is built with loving hearts, not with electronic gadgets, high spending, or fancy outings. Tomorrow, look at your credit card carefully, and ask yourself whether you can do without it. Carry in your heart (not your pocket) your confidence in yourself, the love of your family, and your faith in the Almighty – who is your greatest, unlimited, and infallible credit card.